A weakness in internal control over recording retirements of equipment may cause an auditor to
A)inspect certain items of equipment in the plant and trace those items to the accounting records.
B)review the subsidiary ledger to ascertain whether depreciation was taken on each item of equipment during the year.
C)trace additions to the "other assets" account to search for equipment that is still on hand but no longer being used.
D)select certain items of equipment from the accounting records and locate them in the plant.

Question

Quizplus · Accepted Answer

Selecting certain items of equipment from the accounting records and locating them in the plant can help the auditor determine whether the equipment has been retired and removed from the plant or is still in use. This will enable the auditor to identify any weakness in the internal control over recording retirements of equipment. Inspecting certain items of equipment in the plant and tracing those items to the accounting records, reviewing the subsidiary ledger to ascertain whether depreciation was taken on each item of equipment during the year, and tracing additions to the "other assets" account to search for equipment that is still on hand but no longer being used are all audit procedures that may help identify weaknesses in internal control over recording retirements of equipment, but they are not as focused on the specific control weakness described.

A Weakness in Internal Control Over Recording Retirements of Equipment